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Direxion Triple Leverage Funds

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Last Post: 4/22/2009 8:24:34 PM - Followers: 9 - Board type: Free - Posts Today: 0

Direxion Triple Leverage Funds

BGU Direxion Large Cap Bull 3X Shares / BGZ Direxion Large Cap Bear 3x Shares

ERX Direxion Energy Bull 3x Shares / ERY Direxion Energy Bear 3x Shares

FAS Direxion Financial Bull 3x Shares / FAZ Direxion Financial Bear 3x Shares

TNA Direxion Small Cap Bull 3x Shares / TZA Direxion Small Cap Bear 3x Shares

Triple Leverage ETFs Maximize Market Directions
November 05, 2008 at 6:00 am by Heather Hayes

If you need or want more leverage in your exchange traded funds (ETFs), today you’re going to have the choice.

Direxion has launched eight ETFs that are leveraged bull and bear funds designed to seek 300% of the daily performance, or 300% of the inverse of the daily performance, of the four indexes they track.

Among the reasons that Direxion went with triple leverage is that they’d be first on the market with a new and different product, instead of getting lost in a sea of similar products.

“ETFs that are first-movers tend to have an enormous advantage. We didn’t want to come out with products similar to what was already out there,” says Dan O’Neill, president and chief investment strategist. “We believe that that’s what’s going to distinguish them and that will hopefully be a point of attraction for clients. We’ve gone with high leverage because we think it’s attractive.”

When these funds first appeared in registration, there was a bit of chatter about whether triple leverage was a great idea for investors. After all, someone who isn’t careful or mindful of the risks could land themselves in hot water with the standard long and short funds, let alone one that offers triple leverage.

But O’Neill cautions against viewing these or any other leveraged fund in a vacuum.

“The question we have is how you’re going to use them. What matters is how you use them in a broader portfolio. If you use them to hedge, it may lower your risk profile,” he says.

The funds aren’t meant to be the centerpiece of any investors’ portfolio, but as part of an overall strategy. Putting all of your eggs in one basket is never a good idea.

“When someone hears ‘three beta,’ the assumption might be that someone would put 100% of their assets in that fund. They’re meant to be complementary or supplements. They can be used wisely.”

O’Neill says that most of the criticism has come from those who see ETFs as something where every fund needs to be suitable for every investor, but that simply isn’t the case.

“There are lots of investment tools used at the margins or only used by certain players. This is a suite of products that can be used very wisely by certain investors,” says O’Neill.

The early appearance is that professional investors will find these funds of particular interest, including hedge funds, registered investment advisors and proprietary trading desks on Wall Street, says Bill Franca, Direxion’s head of sales.

“I don’t think they’re going to be used by passive investors who are checking their portfolio once every six months. That’s not what these products are for,” Franca points out.

“They’re meant to be used by people who are managing their portfolios very actively, by professional, sophisticated investors,” O’Neill adds.

Overall, these funds are just another tool in the shed for investors who want more leverage. Franca says, “”We believe that leveraged ETFs have already proven their versatility in the marketplace. We feel that there’s definitely a place for leverage because of the ability of different firms to achieve leverage because of what’s going on in the market today.”


#107   New 3x Inverse & Leveraged Treasury ETFs Launch sumisu 04/22/09 08:24:33 PM
#106   Short ETFs under the microscope as SEC mulls rules Art2Gecko 04/14/09 02:00:57 PM
#105   fas nice drop the last few days clairmontasap 03/20/09 07:42:15 PM
#104   in FAS under $8 ~~~> xZx 01/22/09 12:03:02 AM
#103   Direxion has some new ones. kumqwatt 12/19/08 11:44:10 AM
#102   Thanks, I sold those and went long the PCola77 12/17/08 07:46:57 AM
#101   a little late but...good call, LoL!!!! Ace of Spades 12/17/08 04:07:34 AM
#100   I loaded FAZ today. I don't think PCola77 12/08/08 03:37:45 PM
#99   ERX was a great 20% trade today! Wahoo! bliz82 12/05/08 03:44:00 PM
#98   Clearing Corp. Moves To Increase ETF Liquidity Art2Gecko 12/03/08 11:00:33 AM
#97   SKF & BGZ rockin!! GobsoGreen 12/01/08 01:20:51 PM
#96   volatile =) maybe some more of this little GobsoGreen 11/24/08 04:56:13 PM
#95   what direxion, I mean, direction do you all halpern6 11/24/08 04:13:04 PM
#94   SKF yes WOW! has that been moving or what?? GobsoGreen 11/24/08 04:00:46 PM
#93   SKF is my fav! But the premiums after MWM 11/24/08 03:54:37 PM
#92   ya i was just looking at that... it GobsoGreen 11/24/08 03:53:16 PM
#91   The options have too big of spreads right MWM 11/24/08 03:38:08 PM
#90   oh didnt see the options! those look pretty GobsoGreen 11/24/08 03:34:38 PM
#89   I just bought some FAS $25 DEC calls... MWM 11/24/08 10:32:31 AM
#88   ty, gobso... :) agreed on the increased volume xZx 11/22/08 05:55:30 PM
#87   nice job with ERX!, these are all swinging GobsoGreen 11/22/08 05:27:12 PM
#86   they're due to release some more 3x ETF's halpern6 11/22/08 03:59:52 AM
#85   i am bullish gold Buckey 11/21/08 08:19:36 PM
#84   ERX is working... now if only direxionshares would xZx 11/21/08 04:23:51 PM
#83   with gold moving higher i think crude is xZx 11/21/08 12:43:36 PM
#82   i agree. ERX looks very good here, and xZx 11/21/08 10:22:05 AM
#81   ERX getting CHEAP.... but of course so is GobsoGreen 11/21/08 03:58:05 AM
#80   we may see some technical bounces from oversold xZx 11/20/08 10:08:04 PM
#79   Wow simply amazing. The sad thing is...do Profe$$or 11/20/08 09:31:17 PM
#78   check out UYG today: xZx 11/20/08 08:48:14 PM
#77   yes, and BGZ has been killin it the GobsoGreen 11/20/08 04:41:36 PM
#76   Nevermind, found it: RUI. PCola77 11/20/08 02:05:14 PM
#75   Ahh, thanks. Forgot that. Assumed it would still PCola77 11/20/08 01:57:38 PM
#74   BGU/BGZ doesnt follow the DOW... follows the russell GobsoGreen 11/20/08 01:49:20 PM
#73   Now down 1.5% while Dow up 1%+ PCola77 11/20/08 01:00:03 PM
#72   Dow up 2% and BGU up 2.2%. Damn it... PCola77 11/20/08 12:49:59 PM
#71   I'm already loving these babies(BGZ + BGU).....Today is Ace of Spades 11/20/08 12:05:44 AM
#70   financials seem like ground zero in this mess. xZx 11/19/08 08:08:49 PM
#69   and with expire friday..this could be nuts..i'll play harbs 11/19/08 07:40:11 PM
#68   yeah, especially on those options.. wow man.. Art2Gecko 11/19/08 07:30:54 PM
#67   thanks for setting this up.. harbs 11/19/08 07:20:04 PM
#66   I agree. Looks like you have more Profe$$or 11/19/08 07:01:22 PM
#65   I say tarp the TARP. lol Profe$$or 11/19/08 07:00:36 PM
#64   I thought the DOW would bounce off of Profe$$or 11/19/08 07:00:20 PM
#63   UYG weekly ~~~~> xZx 11/19/08 04:39:54 PM
#62   TARP doesn't seem to be doing crap for Art2Gecko 11/19/08 04:34:27 PM
#61   FAS ~~ daily chart ~~> xZx 11/19/08 04:32:13 PM
#60   Loaded a ton of BGU at 30.01 in PCola77 11/19/08 04:20:43 PM
#59   FAS - where is the bottom? Art2Gecko 11/19/08 04:07:29 PM
#58   on a % basis TNA was a much xZx 11/14/08 11:22:48 AM